ACCOUNTING 405 EXAM 3 QUESTIONS
AND ANSWERS 100% PASS 2026/2027
Personal Property - ANS Tangible assets such as equipment and machinery
Real Property - ANS buildings and land
Intangible assets - ANS nonphysical assets
Natural Resources - ANS commodities such as oil, timber, and gold
Subtracted prior depreciation allowed or allowable on the asset
add costs necessary to prepare the asset for use in the business
start with the assets original basis - ANS Choose the items included in the calculation of an
asset's adjusted basis
subtracted prior depreciation allowed or allowable on the asset
add costs necessary to prepare the asset for use in the business
add accumulated depreciation actually taken on the asset
start with the assets OG basis
subtract ordinary repair expenses
@2026 ALLRIGHTS RESERVED 1
, add additional costs for routine maintenance on the asset
a. 5000 - ANS Harry inherited 100 shares of stock from his aunt upon her death. Harry's aunt
purchased the stock 10 years ago for $20 per share. The stock was worth $50 per share on the
date she died. What is the amount of Harry's basis in the stock
a. 5000
b. 20
c. 2000
d. 50
False
the business also needs to know the applicable depreciation convention (e.g half year or mid
quarter) to be used as well as the date placed in service - ANS True or false: in order to
calculate MACRS depreciation, the business needs to know the asset's original cots, recovery
period, and which depreciation method (i.e double declining balance) is used. No other info is
required
personal property, and personal use property - ANS Antoine owns a car. He uses the car for
personal transportation. Which is the applicable classifications of the car
income producing property
investment property
personal property
personal use property
business property
real property
@2026 ALLRIGHTS RESERVED 2
AND ANSWERS 100% PASS 2026/2027
Personal Property - ANS Tangible assets such as equipment and machinery
Real Property - ANS buildings and land
Intangible assets - ANS nonphysical assets
Natural Resources - ANS commodities such as oil, timber, and gold
Subtracted prior depreciation allowed or allowable on the asset
add costs necessary to prepare the asset for use in the business
start with the assets original basis - ANS Choose the items included in the calculation of an
asset's adjusted basis
subtracted prior depreciation allowed or allowable on the asset
add costs necessary to prepare the asset for use in the business
add accumulated depreciation actually taken on the asset
start with the assets OG basis
subtract ordinary repair expenses
@2026 ALLRIGHTS RESERVED 1
, add additional costs for routine maintenance on the asset
a. 5000 - ANS Harry inherited 100 shares of stock from his aunt upon her death. Harry's aunt
purchased the stock 10 years ago for $20 per share. The stock was worth $50 per share on the
date she died. What is the amount of Harry's basis in the stock
a. 5000
b. 20
c. 2000
d. 50
False
the business also needs to know the applicable depreciation convention (e.g half year or mid
quarter) to be used as well as the date placed in service - ANS True or false: in order to
calculate MACRS depreciation, the business needs to know the asset's original cots, recovery
period, and which depreciation method (i.e double declining balance) is used. No other info is
required
personal property, and personal use property - ANS Antoine owns a car. He uses the car for
personal transportation. Which is the applicable classifications of the car
income producing property
investment property
personal property
personal use property
business property
real property
@2026 ALLRIGHTS RESERVED 2
